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Item 2. Management’s Discussion and Analysis

2023-11-07 compared with 2023-08-04 · 111 added, 101 removed, 608 unchanged (26% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three and six months ended June 30, 2023 with the three and six months ended June 30, 2022.

The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three and nine months ended September 30, 2023 with the three and nine months ended September 30, 2022.

The results of operations discussion is combined for Tanger Factory Outlet Centers, Inc.

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the possibility of future asset impairments;

potential developments, expansions, renovations, acquisitions or dispositions of outlet centers, including our Nashville development;

potential developments, expansions, renovations, acquisitions or dispositions of outlet centers;

anticipated impacts from our newly-opened Nashville outlet center;

compliance with debt covenants;

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General Overview

As of June 30, 2023, we had 29 consolidated outlet centers in 18 states totaling 11.3 million square feet, one managed center and one center under construction.

As of September 30, 2023, we had 29 consolidated outlet centers in 18 states totaling 11.3 million square feet, two managed centers and one center under construction, which subsequently opened in October 2023.

We also had 6 unconsolidated outlet centers totaling 2.1 million square feet, including 2 outlet centers in Canada.

The table below details our new developments, expansions and dispositions of consolidated and unconsolidated outlet centers that significantly impacted our results of operations and liquidity from January 1, 2022 to June 30, 2023 (square feet in thousands):

Consolidated Outlet Centers Unconsolidated Joint Venture Outlet Centers Managed Centers

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As of December 31, 2022 11,353 29 2,113 6 457 1

Palm Beach, Florida Third Quarter 300 1

Other (4) — — — — —

As of June 30, 2023

As of September 30, 2023

11,349 29 2,113 6 757 2

The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of June 30, 2023.

The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of September 30, 2023.

Except as noted, all properties are fee owned.

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Leasing Activity

The following table provides information for our consolidated outlet centers related to leases for new stores that opened or renewals that were executed during the respective trailing twelve month periods ended June 30, 2023 and 2022:

Comparable Space for Executed Leases (1) (2)

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RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2023 to the three months ended June 30, 2022

Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022

Net income increased $4.5 million in the 2023 period to $28.9 million as compared to net income of $24.3 million for the 2022 period.

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• a higher average portfolio occupancy rate in the current period,

• positive leasing spreads upon renewal and re-tenanting since the previous period

• higher management, leasing and other services income from the addition of management responsibilities for a center during the third quarter of 2022, and

• lower general and administrative costs due to the previous period containing executive severance costs that did not recur.

• positive leasing spreads upon renewal and re-tenanting since the previous period, and

• higher interest income

partially offset by

• higher general and administrative expenses

In the tables below, information set forth for properties disposed includes the Blowing Rock outlet center sold in December 2022.

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$ 110,835 $ 105,569 $ 5,266

Rental revenues at existing properties was positively impacted by higher occupancy between the periods, 97.1% compared to 94.8% and positive leasing spreads upon renewal and re-tenanting since the previous period.

Rental revenues at existing properties was positively impacted by higher occupancy between the peri ods, 97.9% c ompared to 96.4% and positive leasing spreads upon renewal and re-tenanting since the previous period.

These increases were partially offset by lower variable revenues, which are derived from tenant sales.

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$ 4,373 $ 3,980 $ 393

Other revenues from existing properties increased in the 2023 p eriod due to an increase in other revenue streams, such as EV charging, paid media, sponsorships and onsite signage, on a local and national level.

Other revenues from existing properties increased in the 2023 period due to an increase in other revenue streams, such as EV charging, paid media, sponsorships and onsite signage, on a local and national level.

PROPERTY OPERATING EXPENSES

Property operating expenses increased $1.0 million in the 2023 period compared to the 2022 period.

Property operating expenses increased $682,000 in the 2023 period compared to the 2022 period.

The following table sets forth the changes in various components of property operating expenses (in thousands):

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$ 36,758 $ 36,076 $ 682

Property operating expenses from existing properties increas ed in the 2023 period primarily due to higher common area maintenance expenses in the 2023 period compared to the 2022 period and high er property tax costs at certain centers.

Property operating expenses from existing properties increased in the 2023 period primarily due to timing of advertising costs compared to the prior period, higher common area maintenance expenses in the 2023 period compared to the 2022 period and higher property tax costs at certain centers.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses decreased $1.0 million in the 2023 period compared to the 2022 period.

The prior period included $2.4 million of compensation costs related to executive severance.

The 2023 period included no such executive severance.

Excluding executive severance, expenses increased from the hiring of key employees since the 2022 period to drive operational and growth initiatives.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization costs decreased $831,000 in the 2023 period compared to the 2022 period.

2023 2022 Increase/(Decrease)

Depreciation and amortization expenses from existing properties $ 25,389 $ 25,987 $ (598)

Depreciation and amortization from property disposed — 233 (233)

$ 25,389 $ 26,220 $ (831)

INTEREST EXPENSE

Interest expense increased $390,000 in the 2023 period compared to the 2022 period due to the combination of higher interest rates and higher amounts of variable rate debt.

During the fourth quarter of 2022 we refinanced the variable rate mortgage in our Memphis consolidated joint venture, increasing the outstanding balance to $51.7 million from $40.1 million.

In addition, also during the fourth quarter of 2022, we amended and restated our unsecured term loan and increased the outstanding balance from $300.0 million to $325.0 million.

These factors were partially offset by higher capitalized interest on our Nashville, TN development project.

General and administrative expenses increased $1.6 million in the 2023 period compared to the 2022 period.

The increase in expenses is primarily from the hiring of key employees since the 2022 period to drive operational and growth initiatives.

In addition we experienced higher health care benefit costs and executive placement fees during the 2023 period.

OTHER INCOME (EXPENSE)

Other income (expense) decreased approximately $252,000 in the 2023 period.

The 2023 period had significantly higher investment income from short-term investments of cash at higher interest rates than were available in the 2022 period.

This was offset by a $2.4 million gain on sale of a non-real estate asset in the 2022 period.

Other income (expense) increased approximately $504,000 in the 2023 period.

The 2023 period had higher investment income from short-term investments of cash at higher interest rates than were available in the 2022 period.

EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURES

Equity in earnings of unconsolidated joint ventures decreased approximately $521,000 in the 2023 period compared to the 2022 period.

The decrease is primarily due to the increase in interest rates during the second half of 2022 that has negatively impacted two of our joint ventures.

The Columbus joint venture variable interest rate mortgage was refinanced in September 2022 and now has a fixed interest rate of 6.25%.

The Galveston/Houston joint venture mortgage was floating rate during the majority of both periods.

Interest rates rose approximately 4% during the comparable periods.

The Galveston mortgage was refinanced during June 2023 and is now SOFR +3.00%.

Comparison of the six months ended June 30, 2023 to the six months ended June 30, 2022

Equity in earnings of unconsoli dated joint ventures increased approximately $334,000 in the 2023 period compared to the 2022 period.

The increase is primarily related to one joint venture that experienced an increase in leasing revenue.

Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022

Net income increased $12.4 million in the 2023 period to $79.0 million as compared to net income of $66.6 million for the 2022 period.

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• positive leasing spreads upon renewal and re-tenanting since the previous period

• higher management, leasing and other services income from the addition of management responsibilities for a center during the third quarter of 2022, and

• higher management, leasing and other services income from the addition of management responsibilities for a center during the third quarter of 2022,

• lower common area maintenance snow removal costs in the current period as a result of a comparatively mild 2023 winter, and

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partially offset by

• higher general and administrative expenses, and

• the current period did not contain lease termination fees and the prior year period included significant termination rents from several tenants.

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$ 319,005 $ 311,587 $ 7,418

Rental revenues at existing properties were positively impacted by higher occupancy between the periods, 97.1% compared to 94.8% and positive leasing spreads upon renewal and re-tenanting since the previous period.

Rental revenues at existing properties were positively impacted by higher occupancy between the perio ds, 97.9% compared to 96.4% and positive leasing spreads upon renewal and re-tenanting since the previous period.

These increases were partially offset by lower variable revenues, which are derived from tenant sales.

Lease termination fees decreased primarily because the 2022 period included isolated terminations of certain leases with multiple years of remaining term.

No such significant terminations occurred in the 2023 period.

MANAGEMENT, LEASING AND OTHER SERVICES

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$ 103,618 $ 105,531 $ (1,913)

Property operating expenses from existing properties decreased in the 2023 period primarily due to the timing of certain advertising and promotional costs and the mild winter in the 2023 period compared to the 2022 period, resulting in lower snow removal costs.

Property operating expenses from existing properties decreased in the 2023 period primarily due to the mild winter in the 2023 period compared to the 2022 period, resulting in lower snow removal costs.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $942,000 in the 2023 period compared to the 2022 period.

The prior period included $2.4 million of compensation costs related to executive severance.

The 2023 period included a $806,000 reversal of previously expensed compensation related to a voluntary executive departure.

General and administrative expenses increased $2.5 million in the 2023 period compared to the 2022 period.

The 2023 period included an $806,000 reversal of previously expensed compensation related to a voluntary executive departure and the 2022 period included $2.4 million of compensation costs related to executive severance.

Excluding the impact of executive departures, expenses increased from the hiring of key employees since the 2022 period to drive operational and growth initiatives.

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In addition, also during the fourth quarter of 2022, we amended and restated our unsecured term loan and increased the outstanding balance from $300.0 million to $325.0 million.

These factors were partially offset by higher capitalized interest on our Nashville, T N development project.

These factors were partially offset by higher capitalized interest on our Nashville, TN development project.

OTHER INCOME (EXPENSE)

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EQUITY IN EARNINGS OF UNCONSOLIDATED JOINT VENTURES

Equity in earnings of unconsolidated joint ventures decreased approximately $1.1 million in the 2023 period compared to the 2022 period.

The decrease is primarily due to the increase in interest rates during the second half of 2022 that has negatively impacted two of our joint ventures.

Equity in earnings of unconsolidated joint ventures decreased approximately $765,000 in the 2023 period compared to the 2022 period.

The decrease is primarily due to the increase in interest rates during the second half of 2022 and continuing into 2023 that has negatively impacted two of our joint ventures.

The Columbus joint venture variable interest rate mortgage was refinanced in September 2022 and now has a fixed interest rate of 6.25%.

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The Galveston mortgage was refinanced during June 2023 and is now SOFR +3.00%.

In conjunction with the refinance, the joint venture entered into a $29.0 million interest rate swap that fixes Daily SOFR at 4.44% until December 2025.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

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We currently intend to use the net proceeds from any sale of shares pursuant to the ATM Offering for working capital and general corporate purposes.

As of June 30, 2023, we had approximately $60.1 million remaining available for sale under the ATM Offering program.

There were no sales of our shares during the first six months of 2023 or for the full year 2022.

As of September 30, 2023, we had approximately $57.4 million remaining available for sale under the ATM Offering program.

We recorded $2.7 million of proceeds from shares issued during the first nine months of 2023 and none for the full year 2022.

The following table sets forth information regarding settlements under our ATM Offering program:

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Number of common shares settled during the period 106,615 — 106,615 —

Average price per share $ 24.89 $ — $ 24.89 $ —

Aggregate gross proceeds (in thousands) $ 2,654 $ — $ 2,654 $ —

Aggregate net proceeds after commissions and fees (in thousands) $ 2,621 $ — $ 2,621 $ —

Share Repurchase Program

In May 2023, the Company’s Board of Directors authorized the repurchase of up to $100.0 million of the Company’s outstanding shares through May 31, 2025.

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The Company may, from time to time, enter into Rule 10b5-1 plans to facilitate the repurchase of its shares under this authorization.

The Company did not repurchase any shares for the three months ended June 30, 2023 or 2022.

The remaining amount authorized to be repurchased under the program as of June 30, 2023 was approximately $100 million.

The Company did not repurchase any shares for the three months ended September 30, 2023 or 2022.

The remaining amount authorized to be repurchased under the program as of September 30, 2023 was approximately $100 million.

In January 2023, the Company's Board of Directors declared a $0.22 cash dividend per common share payable on February 15, 2023 to each shareholder of record on January 31, 2023, and in its capacity as General Partner of the Operating Partnership, a $0.22 cash distribution per Operating Partnership unit to the Operating Partnership's unitholders.

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In July 2023, the Company’s Board of Directo rs declared a $0.245 cash dividend per common share payable on August 15, 2023 to each shareholder on record on July 31, 2023, and in its capacity as General Partner of the Operating Partnership a $0.245 cash distribution per Operating P artnership unit to the Operating Partnership’s unitholders.

In October 2023, the Company’s Board of Directors declared a $0.26 cash dividend per common share payable on November 15, 2023 to each shareholder on record on October 31, 2023, and in its capacity as General Partner of the Operating Partnership a $0.26 cash distribution per Operating Partnership unit to the Operating Partnership’s unitholders.

LIQUIDITY AND CAPITAL RESOURCES OF THE OPERATING PARTNERSHIP

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We manage our capital structure to reflect a long-term investment approach and utilize multiple sources of capital to meet our requirements, including without limitation, cash on hand, retained cash flow from operations and debt and equity issuances.

Our ability to access capital on favorable terms could be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, macroeconomic conditions, including rising interest rates and inflation, and other risks detailed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

Our ability to access capital on favorable terms could be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, macroeconomic conditions, including rising interest rates and inflation, geopolitical conflict and other risks detailed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

Capital Expenditures

The following table details our capital expenditures for consolidated outlet centers for the six months ended June 30, 2023 and 2022 (in thousands):

Six months ended June 30,

The following table details our capital expenditures for consolidated outlet centers for the nine months ended September 30, 2023 and 2022 (in thousands):

Nine months ended September 30,

2023 2022 Change

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New Development of Consolidated Outlet Centers

In May 2022, we broke ground on our center in Nashville, Tennessee.

The center, which will be approximately 290,000 square feet, has a planned grand opening of October 27, 2023 at an estimated cost of $143.0 million to $147.0 million with a projected stabilized yield of 7.5% to 8.0%.

Through June 30, 2023, we had incurred costs of $89.3 million associated with this development.

In October 2023, we opened our Nashville, Tennessee center of approximately 291,000 square feet with 96.5% occupancy.

Potential Future Developments, Acquisitions and Dispositions

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We may use joint venture arrangements to develop potential sites.

We expect to maintain sufficient liquidity to fund existing capital expenditures, including completion of our Nashville, Tennessee asset.

We expect to maintain sufficient liquidity to fund existing capital expenditures.

In the case of projects to be wholly-owned by us, we expect to fund these projects with cash on hand, borrowings under our unsecured lines of credit and cash flows from operations, but may also fund them with capital from additional public debt and equity offerings.

For projects to be developed through joint venture arrangements, we may use collateralized construction loans to fund a portion of the project, with our share of the equity requirements funded from sources described above.

We intend to continue to grow our portfolio by developing, expanding or acquiring additional retail real estate assets.

Future retail real estate assets may be wholly-owned by us, owned through joint ventures or partnership arrangements, or through management agreements.

We intend to continue to grow our portfolio by developing, expanding or acquiring additional outlet and retail real estate assets.

Future real estate assets may be wholly-owned by us, owned through joint ventures or partnership arrangements, or through management agreements.

However, you should note that any developments or expansions that we, or a joint venture that we have an ownership interest in, have planned or anticipated may not be started or completed as scheduled, or may not result in accretive net income or funds from operations ("FFO").

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We may also enter into letters of intent for the purchase or sale of properties.

Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated, or if consummated, may not result in an increase in earnings or liquidity.

Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated.

Unconsolidated Real Estate Joint Ventures

From time to time, we form joint venture arrangements to develop outlet centers.

As of June 30, 2023 we have partial ownership interests in six unconsolidated outlet centers totaling approximately 2.1 million square feet, including two outlet centers in Canada.

As of September 30, 2023 we have partial ownership interests in six unconsolidated outlet centers totaling approximately 2.1 million square feet, including two outlet centers in Canada.

See Note 4 to the consolidated financial statements for details of our individual joint ventures, including, but not limited to, carrying values of our investments, fees we receive for services provided to the joint ventures, recent development and financing transactions and condensed combined summary financial information.

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Contractual Obligations

There were no material changes in our contractual commitments during the six months ended June 30, 2023 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, other than the following updates to our contractual obligations for future debt and interest payments over the next five years and thereafter as of June 30, 2023.

There were no material changes in our contractual commitments during the nine months ended September 30, 2023 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, other than the following updates to our contractual obligations for future debt and interest payments over the next five years and thereafter as of September 30, 2023.

Future Debt Obligations

As described further in Note 6 of the notes to the consolidated financial statements, as of June 30, 2023, scheduled maturities of our existing long-term debt for the remainder 2023 and for 2024, 2025, 2026 and 2027 are $2.4 million, $5.1 million, $1.5 million, $407.4 million and $625.0 million, respectively.

As of June 30, 2023, scheduled maturities after 2027 aggregate to $400.0 million.

As described further in Note 6 of the notes to the consolidated financial statements, as of September 30, 2023, scheduled maturities of our existing long-term debt for the remainder 2023 and for 2024, 2025, 2026 and 2027 are $1.2 million, $5.1 million, $1.5 million, $407.4 million and $625.0 million, respectively.

As of September 30, 2023, scheduled maturities after 2027 aggregate to $400.0 million.

Future Interest Payments

We are obligated to make periodic interest payments at fixed and variable rates, depending on the terms of the applicable debt agreements.

Based on applicable interest rates and scheduled debt maturities as of June 30, 2023, these interest obligations total approximately $47.9 million over the next twelve months.

The following table sets forth our changes in cash flows from June 30, 2023 and 2022 (in thousands):

Six months ended June 30,

Based on applicable interest rates and scheduled debt maturities as of September 30, 2023, these interest obligations total approximately $51.5 million over the next twelve months.

The effective interest rate includes interest rate swap agreements that currently fix the base Adjusted SOFR rate at a weighted average of 0.5% on notional amounts aggregating $300 million.

Additional details on the Company’s interest rate strategy are as follows:

Effective Date Maturity Date Notional Amount Bank Pay Rate

Company Fixed Pay Rate

Interest rate swaps:

Current February 1, 2024 $300,000 Adjusted SOFR 0.5 %

Forward-starting:

February 1, 2024 February 1, 2026 $60,000 Adjusted SOFR 3.4 %

February 1, 2024 August 1, 2026 $65,000 Adjusted SOFR 3.8 %

February 1, 2024 January 1, 2027 $75,000 Adjusted SOFR 4.3 %

$200,000 Adjusted SOFR 3.9 %

The following table sets forth our changes in cash flows from September 30, 2023 and 2022 (in thousands):

Nine months ended September 30,

2023 2022 Change

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Effect of foreign currency rate changes on cash and equivalents (315) (93) (222)

Net increase in cash and cash equivalents $ 831 $ 33,056 $ (32,225)

Net increase (decrease) in cash and cash equivalents

$ (23,908) $ 19,398 $ (43,306)

Operating Activities

In the first and second quarter of 2023, our net cash provided by operating activities increased year over year primarily due to changes in working capital and lower property operating expenses.

In the first nine months of 2023, our net cash provided by operating activities increased year over year primarily due to changes in working capital and lower property operating expenses.

Investing Activities

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Financing Activities

Net cash used in financing activities increased during the first six months of 2023 primarily due to an increase in dividends paid and a higher amount of net share settlements related to vesting of equity awards.

Net cash used in financing activities increased during the first nine months of 2023 primarily due to an increase in dividends paid and a higher amount of net share settlements related to vesting of equity awards, offset by proceeds from our common share offering under our ATM program.

Financing Arrangements

As of June 30, 2023, unsecured borrowings represented 95% of our outstanding debt and 93% of the gross book value of our real estate portfolio was unencumbered.

As of September 30, 2023, unsecured borrowings represented 95% of our outstanding debt and 93% of the gross book value of our real estate portfolio was unencumbered.

The Company guarantees the Operating Partnership’s obligations under our lines of credit and our term loan.

As of June 30, 2023, we maintained unsecured lines of credit that provided for borrowings of up to $520.0 million.

The unsecured lines of credit as of June 30, 2023 included a $20.0 million liquidity line and a $500.0 million syndicated line.

As of September 30, 2023, we maintained unsecured lines of credit that provided for borrowings of up to $520.0 million.

The unsecured lines of credit as of September 30, 2023 included a $20.0 million liquidity line and a $500.0 million syndicated line.

The syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances.

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Amounts accumulated for such payments will be used in the interim to reduce the outstanding borrowings under our existing unsecured lines of credit or invested in short-term money market or other suitable instruments.

As of June 30, 2023, the Company’s total liquidity was approximately $748.4 million, including cash and cash equivalents on the Company’s balance sheet, short-term investments and the full undrawn capacity under its $520.0 million unsecured lines of credit.

As of September 30, 2023, the Company’s total liquidity was approximately $721.6 million, including cash and cash equivalents on the Company’s balance sheet, short-term investments and the full undrawn capacity under its $520.0 million unsecured lines of credit.

We expect to have sufficient liquidity to meet our obligations for at least the next twelve months.

We believe our current balance sheet position is financially sound;

however, due to the economic uncertainty caused by the current macroeconomic environment, including rising interest rates and inflation, and the inherent uncertainty and unpredictability of the capital and credit markets, we can give no assurance that affordable access to capital will exist between now and when our next significant debt matures, which is our senior notes due September 2026.

however, due to the economic uncertainty caused by the current macroeconomic environment, including rising interest rates and inflation, geopolitical conflict and the inherent uncertainty and unpredictability of the capital and credit markets, we can give no assurance that affordable access to capital will exist between now and when our next significant debt matures, which is our senior notes due September 2026.

Equity Offerings under the ATM Offering Program

In February 2021, we established the ATM Offering program whereby we may offer and sell the Company's common shares having an aggregate gross sales price of up to $250.0 million.

During 2022 and the first six months of 2023, we did not sell any shares under the ATM Offering program and $60.1 million remains available for sale under the ATM Offering program.

During 2022 we did not sell any shares under the ATM Offering program and for the first nine months of 2023, we settled Common Shares for an aggregate sales price of $2.7 million under the ATM Offering program and $57.4 million remains available for sale under the ATM Offering program.

Debt Covenants

The Operating Partnership’s debt agreements require the maintenance of certain ratios, including debt service coverage and leverage, and limit the payment of dividends such that dividends and distributions will not exceed funds from operations, as defined in the agreements, for the prior fiscal year on an annual basis or 95% on a cumulative basis.

We have historically been, and at June 30, 2023 are, in compliance with all of our debt covenants.

We have historically been, and at September 30, 2023 are, in compliance with all of our debt covenants.

Our continued compliance with these covenants depends on many factors and could be impacted by current or future economic conditions.

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We believe that we have access to the necessary financing to fund our short-term liquidity needs.

As of June 30, 2023, we were in compliance with all financial and non-financial covenants related to our debt obligations.

As of September 30, 2023, we were in compliance with all financial and non-financial covenants related to our debt obligations.

Senior unsecured notes financial covenants Required Actual

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Total Liabilities to Total Adjusted Asset Value < 60% 37 %

Secured Indebtedness to Adjusted Unencumbered Asset Value < 35% 5 %

Secured Indebtedness to Total Adjusted Asset Value < 35% 5 %

EBITDA to Fixed Charges > 1.5 x 4.4 x

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Debt of unconsolidated joint ventures

The following table details information regarding the outstanding debt of the unconsolidated joint ventures and guarantees of such debt provided by us as of June 30, 2023 (dollars in millions):

The following table details information regarding the outstanding debt of the unconsolidated joint ventures and guarantees of such debt provided by us as of September 30, 2023 (dollars in millions):

Joint Venture Total Joint

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In conjunction with this refinance, the joint venture entered into a $29.0 million interest rate swap that fixes Daily SOFR at 4.44% until December 2025.

The Company’s share of of the outstanding debt is $29.0 million.

The Company’s share of the outstanding debt is $29.0 million.

Critical Accounting Estimates

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Our Annual Report on Form 10-K for the year ended December 31, 2022 contains a discussion of our critical accounting estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section.

There have been no material changes to these estimates during the six months ended June 30, 2023.

There have been no material changes to these estimates during the nine months ended September 30, 2023.

Recent Accounting Pronouncements

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Below is a reconciliation of net income to FFO and Core FFO available to common shareholders (in thousands, except per share amounts):

Three months ended Six months ended

June 30, June 30,

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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(2) For the 2023 period, represents the reversal of previously expensed compensation related to a voluntary executive departure.

For the 2022 periods, represents executive severance costs.

For the 2022 period, represents executive severance costs.

(3) Represents gain on sale of the corporate aircraft.

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We define Same Center NOI as Portfolio NOI for the properties that were operational for the entire portion of both comparable reporting periods and which were not acquired, or subject to a material expansion or non-recurring event, such as a natural disaster, during the comparable reporting periods.

We present Portfolio NOI and Same Center NOI on both a consolidated and total portfolio, including pro rata share of unconsolidated joint ventures, basis.

We present Portfolio NOI and Same Center NOI on a consolidated basis.

We believe Portfolio NOI and Same Center NOI are non-GAAP metrics used by industry analysts, investors and management to measure the operating performance of our properties because they provide performance measures directly related to the revenues and expenses involved in owning and operating real estate assets and provide a perspective not immediately apparent from net income (loss), FFO or Core FFO.

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We compensate for these limitations by relying primarily on our GAAP results and using Portfolio NOI and Same Center NOI only as supplemental measures.

Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio and total portfolio at pro rata share (in thousands):

Three months ended Six months ended

June 30, June 30,

Below is a reconciliation of net income to Portfolio NOI and Same Center NOI for the consolidated portfolio (in thousands):

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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Below is a reconciliation of Net Income to Adjusted EBITDA (in thousands):

Three months ended Six months ended

June 30, June 30,

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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Below is a reconciliation of Net Income to EBITDAre and Adjusted EBITDAre (in thousands):

Three months ended Six months ended

June 30, June 30,

Three months ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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(2) For the 2023 period, represents the reversal of previously expensed compensation related to a voluntary executive departure.

For the 2022 periods, represents executive severance costs.

For the 2022 period, represents executive severance costs.

(3) Represents gain on sale of the corporate aircraft.

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During 2023, approximately 1.9 million square feet, or 16% of the total portfolio, including our share of unconsolidated joint ventures, will come up for renewal.

For the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures, as of June 30, 2023, we had lease renewals executed or in process for 64.4% of the space scheduled to expire during 2023 compared to 64.5% of the space scheduled to expire during 2022 that was executed or in process as of June 30, 2022.

For the total portfolio, including the Company’s pro rata share of unconsolidated joint ventures, as of September 30, 2023, we had lease renewals executed or in process for 88.0% of the space scheduled to expire during 2023 compared to 75.6% of the space scheduled to expire during 2022 that was executed or in process as of September 30, 2022.

The majority of our leases contain provisions designed to mitigate the impact of inflation.

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By maintaining a broad base of well-known tenants and a geographically diverse portfolio of properties located across the United States, we believe we reduce our operating and leasing risks.

As of June 30, 2023 no one tenant (including affiliates) accounted for more than 8% of our square feet or 6% of our rental revenues.

As of September 30, 2023 no one tenant (including affiliates) accounted for more than 8% of our square feet or 6% of our rental revenues.

We believe retail real estate will continue to be a profitable and fundamental distribution channel for many brands and retailers.

While we continue to attract and retain additional tenants, if we were unable to successfully renew or re-lease a significant amount of this space on favorable economic terms or in a timely manner, the loss in rent and our Same Center NOI could be negatively impacted in future periods.

Occupancy for our total portfolio, including our share of unconsolidated joint ventures, was 97.2% and 94.9% as of June 30, 2023 and 2022, respectively.

Occupancy for our total portfolio, including our share of unconsolidated joint ventures, was 98% and 96.5% as of September 30, 2023 and 2022, respectively.

Management and Board of Directors

As previously disclosed, the term of Steven B.

Tanger as Executive Chair of the Board ends January 1, 2024.

Following such date, Mr.

Tanger will serve as Non-Executive Chair of the Company’s Board of Directors.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis